US Shale Boss Says Industry’s Golden Age Is ‘Over’

  • Post category:News / US News


Get Your Patriot911 Newsletter In Your Email Inbox

The head of the largest U.S. shale oil producer said that his industry, which saw massive growth following the start of 2022’s energy crisis, is looking to cut back on production and investment, according to the Financial Times.

Shale exports skyrocketed after Russia’s invasion of Ukraine spiked demand for energy, helping the U.S. become the world’s largest crude oil exporter, the FT reported. However, Pioneer Natural Resources CEO Scott Sheffield said that the industry is no longer looking to produce enough oil to dominate the global market due to rising operating costs and long-term investing constraints.

“The aggressive growth era of US shale is over,” Sheffield told the FT. “The shale model definitely is no longer a swing producer.”

Although oil demand and prices have remained above long-term averages, shale producers are paying more to pump oil and are suffering from labor shortages, according to the FT. The industry is being encouraged to allocate most of the profits to investors instead of investing in new extraction sites that are yielding less oil.

The average shale well operator had to pay $7.3 million to drill in 2019; however, drillers will now have to spend $9 million to start pumping oil in 2023, according to the FT, which cited energy consultant Rystad Energy. Increased operating costs have exacerbated the labor shortages which are forcing producers to pay their workers more.

The American shale industry “competed with OPEC” and produced “too much oil,” lowering prices by $20 to $30 per barrel over the past decade and causing investors to no longer support shale producers, Sheffield told the FT. The industry is no longer spending all of its cash on increasing production and is instead reinvesting 40 to 50% of its revenue as it aims to grow at a much smaller rate.

Investors are also concerned that the global push for “decarbonization” and green energy will jeopardize their ability to make money off of shale investments, according to the FT.

Although OPEC decided to cut daily production by 2 million barrels in October 2022 and European Union banned Russian oil shipments in December 2022, oil demand will increase by 1.7 million barrels per day in 2023, according to the International Energy Agency. Global oil production is also expected to grow by 1.1 million barrels per day in 2023 and 1.7 million barrels in 2024, according to the U.S. Energy Information Administration.

Is Biden the ultimate embarrassment to our country?

This poll gives you free access to your Patriot911 Newsletter in your email inbox. Email field is required. Unsubscribe at any time.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Newswire
Share to break through the censorship!

JOIN US @NewRightNetwork on our Telegram, Twitter, Facebook Page and Groups, and other social media for instant news updates!


New Right Network depends on your support. Donate now